Hey Hospitalogists,

Today, I'm sharing a conversation I had on my Claims Denied podcast with AvoMD's Dr. Yair Saperstein, including his "avoid the 800-pound gorilla" GTM posture against Epic.

Quick note before we get into it, I hope you’ll join me for these events:

9/30: Building the VBC Playbook [RSVP] → Let's talk about what the best performing VBC teams are doing.

11/2-11/3: Hospitalogy AI Retreat [APPLY] → Two days in the Sonoran desert with ~50 executives leading their health system's AI transformation. Travel costs covered.

11/15: Happy Hour at HLTH [JOIN ME] → This one is for my revenue-cycle and finance leaders. Killer venue. Open bar.

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BLAKE'S BREAKDOWN

AvoMD's Series A and the Bet That Epic Doesn't Eat EverythingCopy anchor linkCopied

Yair Saperstein, MD MPH, CEO and co-founder of AvoMD, and I were standing on a rooftop at ViVE in Hollywood several months ago, looking out over the hills, when he told me his Series A was about to close. By the time I recorded my Claims Denied podcast episode with Yair, the Series A had closed — roughly $10M — and Avo came out of it making a bigger claim than your average AI scribe vendor.

Avo isn't pitching itself as a scribe, a chart summarizer, or a chatbot. It's pitching itself as the clinical AI operating system that sits on top of the EHR. Bold framing. Whether it sticks depends almost entirely on whether health systems agree they need an OS layer between them and Epic, or whether Epic just builds the OS layer themselves.

This distinct tension is one that every hospital is grappling with and was the gravity of the rest of our conversation lives inside.

Three pitches, one platform: AvoMD’s biz modelCopy anchor linkCopied

During the episode, Yair openly walked me through the three different sales motions Avo runs.

• To large academics, the pitch is hard ROI: throughput reduction, LOS, and CDI lift, with hospitalists getting pre-drafted notes that already account for CCs and MCCs and a partnership with MCG that auto-checks recovery milestones for discharge eligibility.
• To anyone running an Ask Avo pilot, the pitch is more conceptual: an Open-Evidence-style chatbot inside the EHR that's contextualized by patient data, supported by a DynaMed partnership on the evidence side
• To rural systems, the pitch flattens entirely: one vendor, one integration, scribe + summarizer + chatbot, please don't make me manage four contracts AKA consolidation.

Yair is an absolute dawg and a straight shooter. What you see is what you get with him and I appreciate his candor always. Most founders show every customer the same deck. Yair shared that the order of operations changes whether he's selling to Mass General or to a 40-bed CAH in eastern Oregon. That's how go-to-market actually works in this industry, and most pitch decks would never admit it.

Avoiding the 800-pound gorillaCopy anchor linkCopied

Epic kept reappearing as the question, which it always does in any AI-in-the-EHR conversation worth having. Yair's framework: avoid the gorilla. Avo's bet is that no CIO gets fired for staying Epic-first on roadmap items, but plenty of CFOs will green-light a separate vendor when the ROI shows up inside the first year. He goes to UGM annually, sits in the front row, and apparently once shouted out a country Judy missed during her recap. I asked Judy to come on this podcast, by the way. She declined. Then she went on Freakonomics. SMH.

What I think is actually interesting is the gap between CIO buying behavior and CFO buying behavior. Two years ago, "implement AI" sat at the top of the priority list — a vendor-agnostic objective. Today the priority list is denials, throughput, CDI, LOS, with hard-dollar thresholds attached. That shift moves AI buying out of the IT roadmap and into the operating budget, which is a much friendlier place for a startup with one or two narrow ROI claims to defend.

CFO thesis is real. Whether Avo can hold the line against Epic's native roadmap on chart summarization, ambient documentation, and contextual chat is a different question, and one that's going to get answered in the next 18 months whether anyone's ready.

An OpenEvidence value questionCopy anchor linkCopied

I couldn't help myself. I pushed Yair on whether OpenEvidence is overvalued at the price the latest round implied. He didn't take the bait. But what he did say is that OpenEvidence has been a meaningful tailwind for the entire clinical AI category: investor sentiment, clinician trust, the "will doctors actually use this" question all flipped from skeptical to assumed in roughly 24 months.

My read is unchanged. EV-to-ARR sticker shock on Open Evidence's last round is real, and the B2C-to-clinician motion is faster but structurally weaker than the B2B-to-EHR motion Avo is running. Yair compared the dynamic to Apple vs. Microsoft, with Avo casting itself as the integrated front-end-and-back-end Apple play. We'll see who actually wears the turtleneck in five years.

Yair’s take on primary care and the autonomous physicianCopy anchor linkCopied

Here's where Yair got controversial, and to his credit, he didn't dodge: most of primary care, in his view, ends up replaced by AI. Voice and visual chatbots, at-home labs, wearable streams, and anything currently delivered via telehealth, he argues, is on the table. Inpatient is harder. Subspecialty is harder. But ambulatory primary care, the part of healthcare where margins are already thin and operators already treat the panel as a loss-leader feeder for downstream services, is the most exposed.

I have a slightly different framing, which I shared on the pod. I think the AI primary care wave stratifies and fragments before it eventually consolidates.

• Worried-well consumers end up in DTC AI front-doors that look like ChatGPT with a referral button.
• Payors run their own AI triage layers as steerage and quality plays.
• Health systems run theirs as referral capture and network leakage prevention.

The consolidation question sits squarely in whether UnitedHealth or some equivalent simply acquires the leading AI primary care company and bolts it onto the existing referral engine. Yair raised the same scenario on tape. This is a huge question and existential threat for digital front door investment across the nation.

Deeper implication, if Yair is right: the PCP shortage panic of the last decade gets resolved less by training more residents and more by replacing the function. Which has obvious second-order effects on workforce policy, GME funding, and the long tail of independent primary care groups still trying to exist.

The regulatory catalyst nobody's pricing inCopy anchor linkCopied

Under-discussed catalyst in all of this: regulation. Yair name-checked a Dr. Oz appearance at ViVE where Oz reportedly said the administration's goal is for every patient to have access to agentic AI by the end of its four years. Pair that with January's FDA shift on the medical-device definition for clinical decision support, and you have the actual regulatory environment most people building in this space haven't priced into their roadmaps.

State-by-state fragmentation is still the open variable. We've already seen pushback in Utah on AI-assisted prescribing, and I'd expect more red-state-blue-state divergence here, the same way we've seen with telehealth, abortion access, and compounded GLP-1s. If you're an enterprise buyer, your AI rollout strategy probably needs a 50-state regulatory matrix faster than you're modeling.

AvoMD’s Series A betCopy anchor linkCopied

For my money, the most interesting bet Avo is on the hypothesis that the clinical workflow inside the EHR is going to be re-orchestrated by something other than the EHR vendor itself. If that hypothesis is right, Avo has a real moat. If it's wrong, Epic eats this entire category in 36 months. I'd put the odds somewhere in between, which is exactly the kind of place a Series A bet should live. Either way, I’m a fan of Yair and the whole team as they’re building the right way and are straight shooters in the industry.

ON YOUR RADAR 

• Resource: Read my article on how OhioHealth turned one Qventus win — 13,000 excess hospital days saved — into an enterprise-wide bet across surgical growth and perioperative care.*
• Breakdown: Ascension is selling its ownership stake in the Arizona Medicaid insurer Mercy Care to Aetna. Read more.
• Read: Intermountain Health closed a deal for majority stakes in two Idaho hospitals, to the tune of $795M. Read more.
• Listen: Three topics, no script, healthcare's messiest debates. ICYMI, check out my podcast episode with Teira Gunlock, CEO of First Stop Health, and Dr. Eric Bricker, Chief Medical Officer of AHealthcareZ.

*This resource is brought to you by one of my brand partners who help make this newsletter possible!

Thanks for the read! Let me know what you thought by replying back to this email.

— Blake